• What does the term adjustable rate mortgage mean?
ARM. A mortgage with an interest rate that may change,
usually in response to changes in the Treasury Bill rate or the prime rate. The purpose of the
interest rate adjustment is primarily to bring the interest rate on the mortgage in line with market
rates. The mortgagee holder is protected by a maximum interest rate (called a ceiling), which might be
reset annually. ARMs usually start with better rates than fixed rate mortgages, in order to compensate
the borrower for the additional risk that future interest rate fluctuations will
• How much can my
parents give toward my purchase of a new home? My husband and I are applying for a conventional
You and your husband must come
up with a minimum down payment of 5% from your own funds. Your parents can then give you any amount
over the 5%.
• What are some
important terms to know while purchasing a home?
Long-Term debt: Anything you owe and are paying back on a
schedule of twelve or more months. Long-term debt usually includes your mortgage loan payment, car,
student loans, credit cards, day care costs, child support and alimony.
Income: Your total income before taxes are taken out. Besides wages, this can include income
such as alimony, child support and public assistance.
interest, taxes and insurance, all of which make up your monthly
Principal: The total amount you are borrowing to pay for a home. This
is usually the purchase price minus the down payment.
Interest: A lender's
chargefor the loan.
Homeowner's Insurance: You must purchase homeowner's
insurance to protect your property against damage, this payment may also be included in your monthly
loan payment. You should collect quotes on insurance policy prices from several companies to try and
get the best deal you can. You may also have to pay for mortgage insurance, which protects the lender
in case you default, or don'tmake your payments on your loan.
fees: These are the fees a lender charges for doing the paperwork involved in getting you a
Escrow: Lenders often ask homeowners to keep future tax and insurance
payments in an escrow account. Thelender may administer these payments, askingyou to "escrow" the
money. This means putting money in an escrow account to make sure funds are readily available to pay
for your insurance and taxes.
• We are in the middle of negotiations to purchase a new home using an FHA mortgage. How much
can the seller give towards closing costs from the purchase price?
Typically the maximum allowed for seller contribution towards the closing cost
is 6% of the sales price. Some lenders will not allow these funds to be used for pre paid expenses.
Things like property tax, homeowners insurance, mortgage insurance, or pre paid interest cannot be
paid by the seller.
• What is included in a monthly mortgage payment?
The monthly mortgage payment mainly pays off principal and interest. Some
lenders include local real estate taxes, homeowner's insurance, and mortgage
• Does MPECU offer
loans for buying rental properties?
offers secondary market loans for rental property. Please contact a loan officer to find out the
details of the program.
• How can I apply for a mortgage with MPECU?
Contact us to set up an appointment with our Real Estate Specialist. You may
also apply for a mortgage loan on line.
• What types of properties does MPECU offer loans for?
MPECU finances residential properties only. We will
finance 1, 2, 3, or 4 family homes, condominiums, townhouses, or cooperative apartments (some
restrictions may apply to co-ops). All properties must be owner- occupied and located in the same
state that MPECU offers loans for purchasing a new home or refinancing your present home. We do not
finance time-shares as this is not a form of home ownership. We also will finance leased land such as
the leases Allete currently offers. We also can do some types of mobile homes in which the owner owns
both the home and the land. We will not be able to do mobile home located in trailer
• I’m looking to buy
a rental property. What is the required down payment for this type of loan?
You should be prepared to put at least 30% down for a
transaction like this. Though you may find a program which requires less down, 30% is the norm in the
• Who can tell me what my property taxes will be?
You county tax assessor. The seller and/or your realtor also should be able to
provide you with the current property taxes for the property.
• What are the various closing costs involved to refinance my home?
In a refinance transaction your current
mortgage is paid off and a new mortgage is recorded. For this reason many of the same items paid when
you purchased the home will apply with the refinance as well.
Closing costs can be divided into
three main categories:
1. Lender Fees – MPECU has very competitive lender
fees. Lender fees include origination, points, application, credit report, appraisal,
2. Third Party (Title/Escrow) Fees - These fees vary by state and the
actual company you select to close your loan. They can include fees for closing, title exam, title
insurance, recording, etc.
3. Prepaid Items - These are items collected at
the time of closing but are not really considered costs. They include items you pay whether or not you
refinance like interest, taxes, and hazard insurance.
• How long does the mortgage process normally
Most mortgage loans take 3 to 4
weeks to close. Remember though, there are always exceptions.
• May I overnight my mortgage payment to you?
Yes, you may overnight any payment to us if you choose.
Please be aware that MPECU does not have mail delivery on Saturday. If your primary accounts are with
MPECU, you can use Home Banking to make the transfer yourself.
• We just sold a lot of personal effects for cash
and wish to use it as a down payment on a home purchase. We did not get any receipts for these sales.
Can we use these funds towards our required cash needed to close?
You may have to wait before those funds become seasoned. One part of
processing your loan is to get a verification of deposit. The institution where you have your accounts
will ask you to fill out a form giving both balances and average monthly balances for 90 days. If
there is a large increase from month to month in your account, you may be asked to explain where those
funds came from. Once those funds become seasoned, held for 90 days, they can be used for a down
• What is a reverse
In a regular mortgage, the
lender makes you a loan to buy a home, and you immediately begin to pay the loan back through monthly
payments to the lender. A reverse mortgageis different. The lender loans you money based on the equity
you have built up in your home. In a reverse mortgage, you essentially convert the equity in your home
into cash. The cash may be paid to you in installments or a lump sum. You typically don't need to pay
anything back as long as you live in your home. Rather, the loan generally must be repaid only when
you move or die.
• How long does a closing take at a title company?
Typically the time needed to close a refinance transaction is about one hour.
In a purchase with both the seller and buyer needing to sign it tends to go a little longer. One hour
should be plenty of time to complete the closing on a purchase.
• Does MPECU offer loans for buying a second
MPECU does do both In-House and
secondary market loans for second/vacation homes. Please contact us for more information about the
• How do you know
what amount to pay for my taxes?
be mailed a property tax statement. We do not offer an escrow service for taxes and insurance. You may
setup a separate savings account that you will be responsible for. Remember, in Minnesota taxes are
due May 15th and October 15th of each year. In Wisconsin the due dates are January 31st and July
In the county you reside in, you can go out to their website and print off your tax
statement either by name or parcel #.
• I receive a large amount of child support from my ex husband. Can this income be used to
qualify for a mortgage?
Yes, child support
can be used for qualification. It must run for a three year period past the closing of the loan.
Normally supporting documentation such as your divorce decree and age verification on minors will be
requested at loan application.
• Can I combine my first and second mortgages, equity line or loan when I refinance?
Most times this can be accomplished when
you refinance. There are certain times when thiscan not be done. Because every loan is different, you
should contact a loan officer to review.
• We are buying a new home and have large down payment. The seller has
agreed to pay our closing costs. How much can he contribute toward those charges? We will be using
conventional financing on this transaction.
In a conventional loan, sellers may contribute up to 3% of the sales price.
Excluding any pre paid items. Example of those things would be any escrow deposits or prepaid
• Does MPECU offer
No at this time MPECU
does not offer reverse mortgages.
• How do I order a payoff statement?
You may contact us to request a payoff statementor fax your request to us. A
payoff request submitted by someone other than yourself must include a Release of Information
Permission form signed by you. You can also log into Home Banking under accounts and click on the loan
you wish to have a payoff on.
• How can MPECU help me budget for taxes and insurance?
MPECU offers special share account(s) that can be used by members to save for
large expense items. Deposits can be made automatically with each monthly or payroll mortgage payment
to cover these items.
• What is a mortgage escrow account?
Members often request or are required to have MPECU collect additional funds
with their mortgage payments to cover their property taxes and/or homeowners insurance. In those
cases, the additional funds are deposited into a special savings account . When the member's tax
and/or insurance bills come due, MPECU or the member, can have a check written to pay either their
semi annual tax bill or the yearly homeowners insurance premium.
• Why would I receive a tax bill if I was
escrowed for taxes?
If the loan closed
within 30 days of the tax due date, it is likely the taxing authority will send the bill directly to
you. That bill should be forwarded to your current lender to be processed promptly. This would only
need to be done if your payment includes both taxes and insurance escrows. You should be forwarding
any increases on as soon as they are received. In some cases, lenders have not gotten this information
for over a year. The sooner your lender gets the increase, the smoother any increases will be
Some states are called a 'homeowner area.' The taxing authority will not give the bill
or any tax information to anyone except the homeowner. In this case, the homeowner must forward the
bill to us immediately as taxes cannot be paid without the bill.
• How are my property tax bills paid?
You are responsible for paying your own
property taxes by the due date.
• I’m getting ready to sell my home. What are the normal realtor costs in your area?
The typical realtor costs can range
anywhere from 3-6% ofthe sales price. The exact percentage paid to your realtor is negotiated at the
time you sign your listing agreement.
• What is the difference between the note and the mortgage?
The note is simply your promise to repay the funds given to you. In it you
will see the terms of the transaction; such as loan amount, term, interest rate, and so forth. The
mortgage you sign, along with the note, is the collateralizing instrument for the note. It will also
state the amount of the loan and the term, but it goes into detail your responsibilities as a
mortgagor. Such as keeping the property in good repair and what would happen if you failed to make
your payments. There is a lot of information within a mortgage, every consumer should review such a
document prior to signing one.
• What is the difference between a mortgage pre-qualification and a pre-approval?
A mortgage pre-qualification is a loan originator's
opinion of the mortgage amount for which you qualify. This is typically done with income and asset
verification supplied by the borrower. A credit report would also be requested at that time. A pre-
approval goes a step further and provides you with a certificate and a letter stating that a mortgage
underwriter has reviewed your income, asset documents and credit report. The pre-approval certificate
is often helpful when you negotiate for your home purchase. MPECU offers both a pre-qualification and
a pre-approval to members free of charge.
• We are looking to buy a vacation home. What type of down payment is
required for a purchase like this?
like to see a 10% down payment. Certain restriction apply for these types of purchases. Please contact
your loan officer to review them.
Our main line phone number is 218-336-
• What is the difference between Private Mortgage Insurance and Mortgage Protection Insurance?
Private Mortgage Insurance is paid to the
lender in the off chance that the mortgagor defaults on the loan and the lender cannot make its money
Mortgage Protection Insurance is if the mortgagor is unable to pay (such as if the person
lost their job and could no longer afford to pay), the insurer would pay (for a set amount of
• Where can I find
information about foreclosed properties?
The best place to find out about foreclosed properties is from the county in
which you reside.
• How much coverage do I need for flood insurance?
You are required to have coverage for at least 80% of the replacement cost of
your house or the loan balance, whichever is LESS.
• If my house is on a hill (above the base flood level), does this mean
flood insurance is not required?
Regardless of the elevation of your property, if your dwelling is in an "A" or "V" zone, flood
insurance is required. However, elevation information can be used to get a lower flood premium and/or
to file a Letter Of Map Amendment or Revision (LOMA/LOMR). While the LOMA/LOMR is being reviewed by
FEMA, flood insurance is still required.
• How long before we get our loan documents back after payoff?
The average time is about 45 days from
the date of payoff, if you pay the loan off directly. Any time you sell or refinance and use a title
company for the closing, they will receive the needed loan documents to release the lien by your
former lender. In that case you may receive nothing at all.
• In which states does MPECU offer home equity
and mortgage loans?
At this time, we offer
home equity and mortgage loans in every state in the union. Each state has different rules which
govern mortgages and home equity loans. We will work with other credit unions inother states to make
the process work smoothly for our members.
• What are some mortgage compensating factors?
Mortgage compensating factors can be any of the
following: Ratios, credit score, equity/down payment, assets, and time on the job.
• I’m going to refinance my home. One of my
friends is an appraiser. Can he do the report for the lender I decide to work with?
No. You can not choose the appraiser who will be
inspecting your home. Most lenders must now use a service which orders the appraisals for lending
• Is an updated land
survey of my property necessary to apply for a mortgage?
Generally, a survey is not required as long as a survey endorsement is written
into the title policy. However, there are exceptions; surveys are required on new construction or if
the land is being subdivided in any way. One of the items done for any first mortgage is a plot
sketch, this provides information about your property and it's boundary lines.
• Are no income verification mortgage loans
Because of the tremendous
issues the mortgage industry faced awhile ago, all loans of this type have been removed from the
• We are going to buy
a new home. Can we choose the title company we wish to work with?
No. You can not choose the appraiser who will be inspecting your home. Most
lenders must now use a service which orders the appraisals for lending
• Can I make
additional principal payments on EFT/payroll deduction or payments over the counter?
Additional principal payments can be made along with
your regular monthly payment. The additional principal amount must be made the same day as your
regular payment so that all the interest has been paid.
• I just received a large inheritance from my late aunt’s estate. Can
I use these funds for a down payment?
Just make sure you get a copy of her will and the check given to you. You will be required to prove
these were a inheritance given to you and in not any form of a loan.
• What is a balloon mortgage?
A balloon payment mortgage is a mortgage which does not
fully amortize over the term of the note, thus leaving balance due at maturity.
• Should I sell my house FSB (For Sale by
The number one reason to sell your
home without an agents help is to avoid paying real estate commission. In Minnesota, real estate
commissions can run as much as 7% of the home's sale price, although you maybe able to negotiate a
Time and expertise are major factors in determining whether or not to sell your own
home. Do you have a minimum of one hour per day to spend on advertising, screening buyers and showing
your home? FSBOs need the flexibility to schedule showings at convenient times for buyers. When
negotiating the sale, will you be able to keep your cool if a buyer wants to knock a couple of
thousand off the price because the home is "obviously going to need a complete redecorating job?"
Agents are used to negotiate, and can give an objective prospective of your home.
Also, as a
FSBO, you won't have access to the Multiple Listing Service (MLS) used by real estate agents to locate
homes for buyers. This computerized service lists homes for sale and homes that have sold by
neighborhood, price and features. However, you may be able to list your home on the Internet with a
variety of different companies for a fee.
• Why is there always a three day right to cancel during a mortgage
In the past, many types of
loans were given to consumers who did not understand what they were getting. There is also the chance
that certain mortgage brokers or other types of lenders change the terms of the loan or the costs
without the borrower knowing about them. Per government guidelines, any transaction which involves
putting a mortgage on a owner occupied property must have a three day right to cancel. Thisis three
business days after the initial closing date. This time frame gives the consumer the chance to void
the loan if the terms offered were changed, or if they simply change their mind about taking out the
• When can I convert
my adjustable mortgage to a fixed mortgage?
Not all adjustable rate mortgage (ARM) loans include a conversion option.
Please refer to your ARM Note and/or Mortgage Rider for details regarding your conversion. Please be
aware that every Conversion Option has an expiration date, which is detailed in your ARM Note and/or
• How is maximum
equity calculated with regard to home equity loans?
MPECU adds the total of any first mortgage balance to your new home equity
and divides it by your property's assessed value. This determines your loan-to-value ratio. MPECU
offers home equity loans up to 90% loan-to-value.
information on our home equity loans select the Home Equity Loans on our website or call 218
-336-1800 to talk to a mortgage loan officer.
• Why doesn't my new balance reflect the full amount of my last
Part of your payment goes to
interest, and part goes to principal. Only the payment to principal reduces the balance of your
• What are the cost
associated with doing a Home Equity line of credit loan with MPECU?
The charges for a HELOC loan are as
- Admin fee $50.00 Then a Property evaluation or appraisal is required. Those
charges are between $250-$400.
- A recording fee for each document in your county of
-A flood certification and credit report fee.
-The county tax stamps fee per
$1000 borrowed aka filed mortgage amount.
• How far in advance can I pay my Home Equity Line of Credit (HELOC)
MPECU's system allows our members to
pay the HELOC in advance by two (2) months only. You may pay more, but the next due date will only
advance two (2) months. It is recommended you maintain a monthly payment to keep the interest current
on the loan.
• When I access my
Home Equity Line of credit, is there a minimum amount I must draw?
Yes, there is a $1000.00 minimum draw on your home equity line of
• Can home equity
loans be converted to home equity lines of credit at any time during the term of the loan?
Home equity loans can be converted to
home equity line of credits at any time but you will need to re-qualify at the point in time which you
wish to convert the loan to a line. When you look into refinancing an existing Home equity loan, you
will incur costs.
• How do I use my line of credit to pay off higher interest rate credit cards?
Simply have MPECU deposit the loan proceeds into your
share draft account , or provide copies of the checks you have written from another institution's
checking account to pay off higher interest loans or credit cards.
If it has been three business
days since your loan closed and you have not received your funds, please contact
• How long after
closing will my home equity funds be available to me?
By law, MPECU is required to provide a waiting period of three business days
after closing before making the funds available. This waiting period is in the event you change your
mind about taking the loan. Once this period has passed your loan will be
• Is there a charge
for writing line of credit checks?
does not offer checks or credit cards associated with our Home Equity Line of Credit
• How is interest
accrued on a line of credit?
accrued daily on the outstanding balance for that day. The outstanding balance for that day is
multiplied times the current interest rate. A MPECU line of credit typically involves a variable
interest rate based off of the 365 day calculation. The interest rate will change, mirroring
fluctuations in the index and is repriced on a monthly basis.
• My wife recently died and I wish to establish a HELOC with MPECU. Is
there any information I may need regarding my deceased wife?
Yes. If you have not already filed her death certificate with your court of
record, you will have to do that prior to closing on any mortgage transactions. You will need to have
a certified copy of the death certificate filed in order to remove her name from the title of your
• My spouse and I are
in the final stages of a divorce, and I will be keeping our home. Can I apply for a Home Equity Line
of Credit on this property?
Yes. You can
apply at any time, but this loan can not be closed until two things happen. First, you must have the
final divorce decree signed bya family court judge. Secondly, you must have a quick claim deed signed
by your former spouse transferring all ownership to you. These must be filed along with the divorce
decree at your county of record.
• My mother quick claimed her home to me many years ago after the death of my father. She
retained a life estate in the property. The home has no lien against it. Can I still get a HELOC from
MPECU on my home?
Yes. Your mother would
have to sign both the mortgage and the three day right to cancel form at closing.
• I still owe on a contract for deed for my home.
Can I still do a Home Equity Line of Credit on this property?
First we must determine if you can qualify for the loan. If you are approved
you will have to ask your contract holder. That person would have to be the one who would sign the
mortgage and recession papers at closing. Technically you are not in title to your home, you only have
a contract. The current fee holder, your contract holder, would have to agree to sign the
• My wife and I just
signed on a HELOC. Now she does not want to go through with the loan. Can she cancel the transaction
Yes she can. Any borrower in
all mortgage transaction which are done on owner occupied property can cancel the loan independently
of the other borrowers.
• Can MPECU do 100% financing on a HELOC?
We have lowered our maximum calculative loan value to 90%. This means that if
you have a home valued at $100,000 and you owe $80,000 on your current 1st mortgage, the maximum MPECU
can loan on a HELOC would be $15,000.
• I have applied for a HELOC but have some outstanding collections on my credit report. My loan
officer has told me that they need to be paid off prior to or at closing. They are very old and I
can't remember what they were about. Why is this such an issue?
The reason is that collections can turn into judgments. Once they are
judgments they attach to your home and supersede any mortgage that is of record. In other words they
would take a prior position over any mortgages outstanding. A HELOC needs to be in either a first or
second position on your home. Filed judgments could jeopardized your lender required
• What is "equity" in
Equity is the value of your
ownership in the home, or the amount of the home's value that you own, free and clear of any mortgage
or lien. Until you pay off the loan, the lender has a lien on your home. The more principal you pay,
the more equity you have in your home.
• Can I take out a Home Equity loan for educational purposes?
Yes you can as long as you have equity in
• I want to buy an
single family home and have a friend rent a room from me. Can that room rent be used as income for
Any rent received by a
roommate can not be used as income for loan qualification.
• I had my home on the market with a realtor for the last 6 months. We
had no offers and decided to stay there. Can I still refinance my home if I choose to?
Underwriting guidelines state that any home that has
been listed anytime within the last 12 months is not eligible for a first mortgage
• Most of my income
is from interest received and dividends on stock which I own. Does this income qualify for a mortgage
All interest and dividend income is
allowable for qualification proposes. The only thing you must take into account is it will be averaged
from the last two tax years.
• I have a HELOC with MPECU. What is the minimum amount that can be advanced?
The smallest amount we can advance for a HELOC is
• I'm in the process
of refinancing my home. It seems like my current mortgage holder does not report to any credit
bureaus. My loan officer has asked me for my last 12 months of payment history. What should I gather
All lenders require a 12
month review of mortgage history. The most common way is to produce the copies of the last twelve
checks, front and back, from your payments. You can also use your last twelve months of statements
from the account which paid your mortgage. Make sure you give him a current statement which shows your
present payment amount. Your loan officer can also send a written verification to your current lender.
Sometimes those take a while to be completed.
• What is the cost for an appraisal, which is ordered by MPECU?
MPECU orders from appraisers who charge
in the range of $275.00 to $500.00. Appraisal costs tend to differ in different parts of the state and
the different types of appraisals.
• I have my mortgage at MPECU and will be changing homeowners insurance agents very soon. Is
there any information my new agent may need?
Yes there is. You will need to give your insurance agent the following
information when you make the application.
- 1. Loan number along with the loan type...L5, L80,
- 2. Our formal name and address.
- 3. Mail, fax, or email a copy of the change
You may also want to notify a loan officer at MPECU of the
• Can I roll the closing costs into my mortgage when I'm buying a house?
No, closing costs can not be rolled into your mortgage
and are due at closing. A common theme lately has been for the buyers to ask the sellers to pay a
percentage of the sales price towards closings costs. In a round about way, this is a form of rolling
your closing costs into the mortgage amount.
• If I don't make my mortgage payment on time, will I be reported to
the credit bureaus?
You will be reported
delinquent to the credit bureau after 30 days.
• Does MPECU retain the servicing of their mortgages?
Historically we have held the servicing for nearly all
of our mortgage loans. In certain situations we may have to transfer the servicing at closing of your
loan. If that were to happen, you would be notified long before the actual closing of your
• What is Desk
Originator or Underwriter?
Originator or Underwriter, more commonly called DO/DU, is an automated underwriting platform. All
lenders are required to input into one of these systems prior to submission to the secondary market.
TheDO/DU system then reviews all the information on the loan application and credit report. It then
gives either an approved eligible from the basic information that meets underwriting guidelines or a
ineligible response in certain instances. TheDO/DU approval is not a formal commitment by a lender.
Itis meant to be a tool for underwriters to fully review the file to make sure all requirements will
be met before a formal approval can be given.
• What does "Locking a Loan" mean?
When you lock your mortgage loan, you are deciding on what rate you will close
the transaction with. Locktime vary from 10 days to 120 days. You must close and disburse your loan
within this time frame. If the loan can't be closed for any reason you may have to renegotiate with
your lender prior to setting a closing date.
• What are " Cash Reserves" ?
Cash reserves are the amount lenders require you to have in relation to your
mortgage payment. Typically they require 6 times your total mortgage to be held in some type of
account. This can be in any form or saving, checking, investment, or IRA account.
• Can my mortgage transaction be closed with a "Power of Attorney" (POA) ?
lenders will not allow you to close using a POA. In certain situations they may be allowed, but they
first must be reviewed by the underwriter.
• Can MPECU write a first mortgage loan for a odd number of years and
not your basic 15 or 30 year term?
has the ability to write first mortgages anywhere from 1-30 years. We can tailor our in-house program
to meet individual member needs. For current mortgage rates and answers to your questions
MPECU 218-336-1800 andask for a mortgage officer.
• We are looking to buy our first home soon. My
husband just took a new sales position here in town. He went from a salaried job to a commission based
position. He has been doing this for 6 months now. Can his new compensation be used for loan
Underwriting guidelines state
that all commission based employees must have a two year history of commissions before they can be
used for qualification. After two years the income will be averaged over that time
• What if the
appraisal is less than the price I offered?
Your lender will lend you only enough money to cover a home's value (minus the
amount you'll be paying for a down payment and up-front costs).
You can ask the seller to drop
the price or have the home reappraised in the hope of getting a higher appraisal. Buyers often add a
contingency to the purchase agreement permitting the buyer to cancel the agreement if the home's
appraised value is lower than the price offered.
• We bought our home a number of years ago. Because of the limited down
payment we had at the time, we were required to have mortgage insurance on our home. Can this ever be
removed from our monthly payment?
There are a number of factors which need to be looked at and you need to contact you lender directly
with such a request.
• I have heard the term Balloon/Reset Mortgage. What does this term mean?
This is a balloon mortgage which offers a reset option
at the balloon date. An example would be a mortgage for $30,000 that has payments based on 30 years
but at the end of 5 years is required to refinance the balance of the loan paying off the balloon
note. A Reset Mortgage at the end of the term period (5 years) changes to the current interest rate at
• I have been
remodeling my home and own it free and clear. My problem is I have run out of funds to buy the needed
materials. What can MPECU do to help me finish it?
Once you apply and are approved with credit and income, we can get your home
appraised as is and subject to completion. As long as there is enough equity in your home, we should
be able to help you complete it.
• I wish to buy a new home, but my current home will take a while to sell. All of my equity is
in my current home, it is free and clear. Is there anything MPECU can do to help me purchase my "Dream
We do have some options available
that may work for you. One way isto take a large portion of the equity from your current home by
opening a HELOC (Home Equity line of credit). These funds would then be your down payment on the new
home. Then you would take out a Purchase Money Mortgage on the new home. When your home is sold the
HELOC would then be paid off. We can tailor the size of the mortgages to meet your needs. You must
remember that you will need to qualify with all of the payments at the time of application. There are
quite a few ways this can be handled. Please contact a loan officer at MPECU to discuss a transaction
of this type.
• During the sale of
my home, the title company found an outstanding mortgage on my home. I believe this was from a very
old mortgage loan I had. How do get this removed from title?
First you should check your files for a form called " Satisfaction of
Mortgage". Your former lender may have sent this to you when the loan was paid off. If you can't find
it, you will have to contact the lender in question. You should have as much information about that
loan available to you when you call. Things such as dates, loan numbers, and the like would be very
helpful to the lender.
• I'm ready to close a cash out refinance on a piece of rental property I own. When will the
funds be available to me after the closing?
There is no three day right to cancel with non owner occupied property. You
should have a check ready for you at the closing table.
• I just signed the papers for a refinance and changed my mind. Do I
have to go through with it?
No. You have
rights as a consumer to void this transaction within 3 business days of signing. You need to contact
your loan officer ASAP and inform him you wish to cancel the transaction. In your closing documents
you will find a form which is called " 3 Day Right of Recession" form. You must sign it and give it to
your lender within 3 business days of the date you closed. Many lenders will count Saturday as a
business day also. You may also want to get a copy of the recession form to the closing agent to cover
all your bases.
• I was refinancing
my home and it took longer then anticipated to complete the transaction. My loan officer told me that
my lock has been broken. What are my options with this lender in regards to what rate I can get?
When you break a lock for what ever
reason, you only have a couple of options. If the rates have declined from the date of application
until the lock was broken you still have the rate you originally locked inat. You can't get the lower
rate. If they have gone up with your current lender you may have to take a higher rate. You may be
given the chance to pay down to the old rate with points. Thisis something to discuss with your loan
• I am set to close
on my refinance any day now, but I realize I would like a little more cash at closing, is this a
Whenever you change your loan
amount, the loan has to be underwritten again. Your lender will also need to disclose to you again any
additional charges that may happen. You will have to wait at least three business days from the date
any new charges are disclosed to you. You will also have to wait for final underwriting
• I was laid off from
my job a year ago. During that time I started my own business. Can I use this income to qualify for a
state that you must have a two year history of self employment to use this income for loan
qualifications. This would be supported by two years of 1040 taxes returns along with a current profit
and loss statement.
• What does it mean when the appraisal done on my property is under review?
It means that your underwriter is not comfortable with
the appraisal submitted to your lender. This could be for a variety of reasons. Your underwriter wants
a second opinion on the value given in the report. The review appraiser will review the report and
either concur with it or he may reduce the proposed value. These types of reviews normally take
between 24-48 hours to complete.
• I'm looking to buy my first home. The property I have chosen is a duplex. Can I use the
proposed rental income for loan qualification?
Underwriting guidelines state that you must have a two year history of
property management in order to have the rental income qualify. This is verified by a review of your
prior two years 1040 tax returns.
• Both my wife and I derive all of our income from SSI. Can we still qualify for a mortgage or
home equity loan?
Yes. In fact SSI income
is grossed up 15% on your loan application. This is to take into account SSI income in not taxed on a
• My husband I and
were just married. Can the money received as gifts be used for our down payment on a new home?
Yes, it can. You may want to deposit it
all at once and keep a copy of the deposit slip. You may also want to cut out your wedding
announcement from your local paper. Most of the time an underwriter will ask for that also. This is to
verify where the funds came from.
• I'm looking at buying my first home with an FHA mortgage. Can I borrow the 3% down payment
from my parents?
No, you can not borrow
the required down payment; but your parents can gift you the required funds. Both you and your parents
will have to sign what is called a gift letter prior to loan approval.
• What does the term credit repair mean?
There are many facets involved with
credit repair. Please visit the Federal Trade Commission website for some very detailed information on
• Why is the amount
of payoff higher than the principal balance?
The payoff reflects your unpaid principal balance only, interest due is added
to the existing balance. Interest accrues daily.
• I am required to have flood insurance, but I have lived in my house
for years and have never been flooded. Is there anyway I can remove my house from being in a flood
Your house may be above the base
flood elevation (flooding level) in which case you may want to file a Letter Of Map Amendment or
Revision (LOMA/LOMR). If this is approved by Federal Emergency Management Agency (FEMA), you may not
be required to maintain flood insurance or your premium may be reduced.